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Compilation of Production-Based GDP of Macao

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Compilation of Production-Based GDP of Macao Compilation of Production-based Gross Domestic Product of Macao Compilation of Macao’s Gross Domestic Product (GDP) is in accordance to the concepts, definitions and classifications of System of National Accounts 1993 (SNA 1993), with considerations to the characteristics of the local economy. In Macao, quarterly and annual GDP at current prices and constant prices are compiled using the expenditure approach, while GDP measured under production approach is compiled only annually at current prices due to lac k of sufficient data. Therefore, expenditure-based GDP is the principal indicator used to measur e the economic growth of Macao. Macao’s annual production-based GDP at basic prices is compiled based on the recommendations of SNA 1993, which is the sum of Gross Value Added (GVA) of all economic activities at basic prices, adding taxes on products, less Financial Intermediation Services Indirectly Measured (FISIM). GVA at basic prices equals value of Gross Output (GO) at basic prices , less value of Intermediate Consumption (IC) at purchasers’ prices. Besides, GVA at producers’ prices (including some of taxes on product) is an important reference to Macao, this is because concession tax (part of taxes on product) collected from concessionaire of water supply, electricity supply, telec ommunications, public car parks, as well as operators of the gaming sector in Macao is deducted from the respective gross receipts or sales revenues, different from value added tax that is collected separately. Hence, concession tax is considered as part of the output generated from activities of the industry and should be included in GVA. As the leading industry of Macao, gaming sector generates enormous amount of tax revenues; however, inclusion of gaming tax in its output will bring in considerable change to both the gaming sector and structure of the entire economy. As supplementary information, Macao compiles and provides GDP estimates at producers’ prices. Data Sources and Methods for Compiling Production-based GDP Economic activities of Macao’s production-based GDP are classified according to the Classification of Economic Activities of Macao – Revision 1 (CAM-Rev.1). Data sources adopted for calculating gross value added (GVA) are figures collected from annual survey on principal economic activit ies, household survey, administrative data from government departments and private organizations. Estimation of gross output (GO), intermediate consumption (IC) and gross value added (GVA) by economic activities is as follows: 1 1. MINING AND QUARRYING; MANUFACTURING ; ELECTRICITY, GAS AND WATER SUPPLY Main data source is the annual Industrial Survey, with value of sales adjusted by changes in inventories of finished goods and work-in-progress. A dditional to production of goods, manufacturers also provide services to other manufacturers , in which the output is value of services provided to other parties (i.e. value of contract work). For sales of unprocessed goods, output is the resale margin (i.e. difference between sales price and purchase cost). Gross Output (GO ) also includes rentals from leasing fixed assets for production, commissions and fees received for services rendered, etc . Intermediate Consumption (IC) comprises cost of materials used in production adjusted with changes in invent ories of materials, plus different types of operating expenses of the establishment, as well as payments of industrial services acquired. Payment to outworkers is part of compensation of employees. Similar data sources and methods are applied to the mining and quarrying, production and distribution of electricity, gas and water sectors. 2. CONSTRUCTION After 1991, main data source is the annual Construction Survey when the survey was conducted for the first time. Estimates prior to 1991 are based on the rate of change of expenditure on construction of buildings and other construction works of the expenditure-based GDP. Gross Output is the value of construction work carried out within the reference period (i.e. sum of actual receipts and the amount receivable for construction work performed). Construction Survey covers both the main contractors and the sub-contractors; however, there are 2 kinds of sub-contractor, “fee sub-contractor” is responsible to build a specific part of a construction, including materia l and human resources; “labour-only sub-contractor” is responsible to ensure provision of human resources; consequently, value of construction work of the sub-contractors is included in the output of both the main and the sub-contractors. To avoid double counting, GO is the sum of value of construction of the main contractors and sub-contractors, less payment to fee sub-contractors, plus rentals from leasing of property or other fixed assets, commissions and fees for provision of consultant and other servic es. Payment to labour -only sub-contractors is part of compensation of employees. 2 Intermediate Consumption (IC) includes cost of construction materials, supplies on sites and other materials used in the course of construction, plus expenses on leasing, repair and maintenance, transport, insurance, technical consultancy, etc. 3. WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES , MOTORCYCLES AND P ERSONAL AND HOUSEHOLD GOODS Main data source is the annual Wholesale and Retail Survey. Gross Output (GO) is the gross margin realized from trading of goods , i.e. value of goods resale less cost of goods sold , plus revenues from other services provided. Intermediate Consumption (IC) is the sum of operating costs and expenses on other services. 4. HOTELS AND RESTAURANTS For the hotel sector, main data source is the annual Hotel and Similar Establishment Survey and supplemented with data provided by Macao Hotel Association. Gross Output (GO ) is the receipts of room sales, plus sales margin of food & beverages and other revenues. For the restaurant sector, main data source is the annual Restaurant and Similar Establishment Survey. Gross Output (GO) is the sales receipt of food and beverages. Intermediate Consumption (IC) of the hotels and restaurants is similar to that of the above-mentioned economic activities. Apart from the annual survey, total receipts of restaurants also include data collected from the Household Budget Survey (households’ expenses on meals bought away from home) and the Visitor Expenditure Survey (visitors’ spending on food and beverages). 5. TRANSPORT , STORAGE AND COMMUNICATIONS Main data source is the annual Transport, Storage and Communications Survey conducted for the first time in 1993. Gross Output (GO ) is the sum of receipts of transport services (passenger and cargo) provided, storage, rentals from leasing of equipment, commissions and other revenues. For the travel agencies, Gross Output (GO) is the total value of sales , less expenditure on purchase of tickets (sea, land and air transport) and costs of package tours and sightseeing tours. Prior to 1993, estimate of maritime and land transport is based on the rate of growth of the population, as well as changes of transport component of the Consumer Price Index (CPI). Before 1999, main data source of receipts of postal, telephone and other telecommunications services was the annual report of the Post Office and the Macao Telecommunication Company, replaced later by the annual Transport, Storage and 3 Communications Survey. Gross Output (GO) is the receipt of services provided, including telephone , plus the margin realized from sales of goods, other fees and commissions received for services rendered. Intermediate Consumption (IC) of this sector is similar that of the above -mentioned economic activities. 6. FINANCIAL INTERMEDIATION Main data source is information provided by The Monetary Authority of Macao (AMCM), from which of Gross Output (GO ), Intermediate Consumption (IC) and Gross Value Added (GVA) are estimated. Gross Output (GO ) of the banking sector is the total value of FISIM, plus commissions received, rentals and other revenues. In Macao, estimate of FISIM or “Financial Intermediation Services Indirectly Measured” is the difference between total interest received from loans and total interest paid to bank deposits, less value of property income from investment of own funds. As regards Forex trading firms, estimate of GO is the net revenues from foreign currencies trading under different exchange rates, plus revenues for other services provid ed. Estimate of GO of insurance sector is based on the following: Total premium actually earned plus Premium supplements (income from investment of technical reserves) less Claims due less Increase of actuarial reserves and reserves for with-profits insura nce (or plus the decrease) plus Net result of reinsurance (reinsurance premium received less reinsurance premium paid) Gross Output (GO) of services of insurance and reinsurance agents is the sum of honorariums, commissions and other revenues received. Intermediate Consumption (IC) of this sector is similar that of the above -mentioned economic activities. 7. REAL ESTATE, RENTING AND BUSINESS ACTIVITIES Estimate of Gross Output of real estate development activities is sum of real estate developers’ margin, plus service charge collected from transaction of property, rental and other receipts. Gross Output of real estate agent is the commissions received from trading and leasing of pr operties, plus other receipts. For business services, estimate of Gross Output 4 is the sum of honorariums , commissions and rentals from leasing of property, machinery and
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